CryptoQuant, a cryptocurrency analysis platform, stated that despite the recent price recovery in Bitcoin, there are still no strong signs of improvement in the fundamental dynamics of the market.
According to the company’s latest assessment, Bitcoin has risen by approximately 30% since February 6th. However, it was argued that this recovery is not enough to say that the market has entered a new bull cycle. The analysis specifically highlighted the weakness on the demand side.
According to CryptoQuant data, “apparent demand” (30-day total) is still in negative territory, hovering around -44,700 BTC. While this figure represents a significant improvement compared to the -89,000 BTC level seen in early April, it still indicates that the market has not yet generated a clear surplus of demand.
The report noted that apparent demand has generally remained negative since the beginning of the year. The brief positive deviation seen at the end of February was attributed to a decrease in Bitcoin production rather than a genuine increase in demand. Specifically, adverse weather conditions in the US earlier in the year led to a significant slowdown in mining activity, temporarily limiting supply.
The analysis stated that the “apparent demand” metric measures the difference between the amount of newly produced BTC and the supply that has remained inactive for more than a year, thus helping to assess whether the structural accumulation in the market can meet the new supply.
In conclusion, CryptoQuant believes that despite the rise in Bitcoin price, a stronger and more sustained recovery in demand is needed for a sustainable rally to occur. Current data suggests the market has not yet crossed this threshold.
*This is not investment advice.
